Local and international developments have an impact on economic growth: David Masondo

Reading Time: 2 minutes

Deputy Finance Minister, David Masondo, says recent developments both locally and internationally have an impact on government plans to grow the economy and reduce unemployment.

He was speaking at a forum hosted by the Kgalema Motlanthe Foundation. Masondo says the effects of the July unrest and the current conflict between Russia and Ukraine have derailed some plans.

Deputy Finance Minister David Masondo says government is addressing the country’s ailing infrastructure, unreliable and unstable energy supply in its efforts to grow the economy.

As a net importer, South Africa had been forced to relook at some of its projects due to costs as a result of surging global inflation.

The Russia and Ukraine conflict is also blamed for triggering the current wave of inflationary pressures. These pressures come as the local economy is still recovering from the aftermath of the Covid-19 pandemic, the July unrest and the KwaZulu-Natal floods.

Video – Finance Minister Enoch Godongwana confident that SA will overcome the disaster in KZN: 

Masondo says South Africa’s economy saw these effects manifesting in many forms such as high levels of joblessness. The unemployment rate came in at 33.9% in the second quarter down from 34.5% in the first quarter.

Masondo says government needs to urgently push for more structural reforms to realize sustainable economic growth. The country is expected to grow at around 1.8% this year.

But others believe that these projections could be revised further downward. At the same time, Masondo says increasing investment to achieve growth is critical.

“It’s important for us to increase investment, however things to be of focus in restoring the country’s energy supply, infrastructure, telecoms,” said Masondo.

Masondo has also cautioned that government spends at least 50% of its budget on social grants.

He says to grow the country’s economy, reliable and stable electricity and water supply are of utmost importance. As these are some of the main factors necessary to attract investment into the country, along with reliable infrastructure.

Video – Finance Minister to table the Medium Term Budget Policy Statement next week: